Oversight of public firms set for radical overhaul

Journalists attend briefing by Treasury Registrar Nehemiah Mchechu on November 27, 2023, in Dar es Salaam. PHOTO | SUNDAY GEORGE

What you need to know:

  • The Treasury Registrar’s office is to be transformed into a public investment authority, whose executive director will also double as chairperson of the entity’s board, according to a shake-up proposed by the government in a new bill

Dar es Salaam. The office of the Treasury Registrar (TR) yesterday shed light on the transformative changes being sought through the Public Investment Authority Bill.

The reforms are expected to usher in a new era of efficiency and responsiveness.

Addressing editors and journalists from various media houses in Dar es Salaam, Treasury Registrar Nehemiah Mchechu outlined several pivotal changes the Bill seeks to bring about, including the establishment of the Public Investment Authority (PIA).

He emphasised the need for the proposed transformation, citing the TR’s current responsibility of managing the performance of public institutions and its limited authority over investment decisions.

“We are seeking to change the name of the Treasury Registrar’s Office to the Public Investment Authority to reflect the current responsibilities and trend of global economic growth,” Mr Mchechu said, underscoring the need for alignment with global economic trends.

One of the central proposals is the creation of the position of PIA executive director.

Mr Mchechu clarified that the PIA executive director, would also serve as chairperson of the authority’s board and would be appointed by the President.

To bolster the financial capabilities of the PIA, the establishment of a public investment fund (PIF) is also on the agenda.

Currently, Chapter 370 lacks specificity regarding the sources of capital funds for investments, prompting the need for a dedicated fund.

Mr Mchechu said the PIF would facilitate timely access to capital, with funds derived from a portion of the revenue collected by the authority, the details of which will be outlined in the regulations.

The proposed legislation also seeks to rectify the existing void in the authority’s ability to approve the entitlements of board members, a shortcoming that has impacted the effectiveness of boards and, consequently, overall performance.

The envisioned power shift would grant the PIA the authority to approve board members’ entitlements, aligning qualifications with responsibilities to enhance efficiency.

Furthermore, the proposed law aims to incorporate responsibilities inherited from the Consolidated Holding Corporation (CHC), a critical aspect overlooked since the transfer of CHC duties to the TR’s Office in 2014.

The inclusion of these responsibilities in the law, along with specified offences and penalties for violations, Mr Mchechu noted, reflected a comprehensive approach to governance and accountability.

One notable change involves the PIA’s role in the selection process for key leadership positions within public institutes. Mr Mchechu acknowledged the existing procedures’ limitations in identifying qualified leaders within the required timeframe.

The proposed law, he said, addresses this by outlining a more effective process for the PIA’s involvement in selecting chairpersons, board members, and senior executives, ensuring the appointment of visionary and qualified leaders.

Another significant enhancement lies in the authority granted to the PIA to issue guidelines for the performance and operation of public institutions.

While the TR currently possesses the ability to issue service guidelines in accordance with Public Service Regulations, the PIA’s expanded authority would encompass a broader spectrum of guidelines, including practical and operational aspects.

Mr Mchechu emphasised that the proposed law would also empower the Minister responsible for public investment to make regulations, further streamlining the governance framework.

Highlighting the benefits of establishing the PIF, Mr Mchechu underscored the government’s ability to make strategic investment decisions promptly, leading to increased operational efficiency.

Additionally, the PIF would serve as a financial safety net for public institutions, enabling them to withstand competition and fostering resilience in the face of economic challenges.